European chips fall as Broadcom miss fuels rotation into software

Sopra Steria SA

04/06/2026 11:47

** European semiconductors fall sharply on Thursday after disappointing results from Broadcom AVGO.O trigger profit-taking across the sector and fuel a rotation into beaten-down software names
** Chip stocks have been among the most popular bets for global investors this year, helping push equity markets to peak levels as the AI boom drives demand for semiconductors
** STMicro STMPA.PA leads declines on Europe's tech index .SX8P, falling 5%; Infineon IFXGn.DE, ASMI ASMI.AS, BE Semiconductor BESI.AS and ASML ASML.AS follow, down 2–4%
** Stephane Ekolo, equity strategist at TFS Derivatives in London, says Broadcom's underwhelming outlook is raising questions about the durability of the AI-driven rally. "As a result, we see a rotation out of semis and European tech names with heavy AI exposure and into software," he adds 
** Software and IT stocks jump, with Capgemini CAPP.PA, Nemetschek NEKG.DE, Dassault Systemes DAST.PA, SAP SAPG.DE and Sopra Steria SOPR.PA up 4–7%, extending a recent recovery after a sharp selloff earlier this year on AI disruption fears
** Angelo Meda, portfolio manager at Banor SIM, says it is too early to call a lasting rotation into software, even as recent sector earnings have eased fears of rapid AI disruption
** "It remains to be seen whether this rotation into AI laggards will persist or prove short-lived," he says
** Broadcom down 11% premarket; U.S. chipmakers Micron Technology MU.O, AMD AMD.O, Intel INTC.O, Qualcomm QCOM.O and Marvell MRVL.O down 3.6-6.5%

(Reporting by Danilo Masoni; Editing by Amanda Cooper)
((Danilo.Masoni@tr.com; Reuters Messaging: danilo.masoni.thomsonreuters.com@reuters.net/))